MEDIATION: AVOIDING THE "S" WORD IN IP LITIGATION

By: Jeffrey A. Schwab, Esq.
August, 2019

The vast majority of even the most hard-fought litigations are resolved through an agreement between the parties. Mediation not only plays a significant role in facilitating settlement, it expands the times when it should be considered. Intellectual Property (IP) disputes are the perfect candidates for broadening the windows when mediation should be considered. There is significantly less “he said, she said” issues. In many cases, the dispute often relates to issues that can be resolved on the basis of objective analysis. As a consequence, they lend themselves to resolution irrespective of the temporal nature of when the parties agree to address resolving them.

It has been my experience that there are three times during the litigation process when settlement is most often considered. Although anecdotal, it is widely recognized that the proverbial “S” word discussions are generally had either at the outset of the dispute, or just before the chief executive officer of one of the parties is scheduled to be deposed, or on the courthouse steps. The paradigm exists whether the matter is relatively modest or has significant financial implications. Although settlement often makes sense at other times, nonetheless, it is resisted out of a concern that suggesting it is a sign of weakness. Conventional wisdom states that “whoever says the “S” word first loses.”

This is where the neutral nature of “mediation” plays an important role. Courts, counsel and the parties are more comfortable suggesting mediation because it does not evidence a lack of confidence in position. To the contrary, it implies a high level of a belief that if facilitated, a resolution can be achieved without surrendering core beliefs. There is also the added benefit that the mediator has knowledge of the general subject matter, and therefore there is a greater likelihood that the discussions can proceed quickly, smoothly and might well permit an out-of-the-box win-win resolution that could not otherwise be achieved in litigation.

Another related timing issue that often delays mediation is the status of discovery. Many of my colleagues, even those who are strong proponents of mediation, recommend it only after there has been significant discovery. In their view, absent discovery, the potential “silver bullet” that undercuts their adversary may never be found. Still others believe that the expenditure of time and expense is necessary before the parties are ready to consider cessation of the dispute.

Admittedly, there is merit to all these views. Nevertheless, more times than not, the basic underlying business issues have been analyzed well before litigation has been considered and the key differences between the parties is articulated in initial pleadings. What needs to be considered is that what can be resolved sooner is often better achieved earlier rather than later.

Bottom line, mediation is not only well suited for intellectual property disputes, it should be considered throughout the course of any dispute. Importantly, it does not require use of the “S” word and timing should not be constrained by artificial benchmarks in the litigation process.

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Jeffrey A. Schwab, Esq. is a member of NAM’s (National Arbitration and Mediation) Hearing Officer Panel and is available to arbitrate and mediate intellectual property cases throughout the United States. He is one of the nation’s leading registered patent attorneys, specializing in all aspects of intellectual property, licensing and advertising law. He has dedicated his practice to protecting clients’ interests worldwide, defending and enforcing intellectual property rights both in the courts and by effectively negotiating the settlements of such disputes.

For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at jsilvey@namadr.com or direct dial telephone at 516-941-3228.

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